The consortium had alleged that iiNet authorised its users to infringe copyright by failing to act on infringement notices provided by AFACT.
Unfortunately for the financially powerful consortium of movie and TV moguls, iiNet not only won the case but also a subsequent appeal in the Federal Court.
This left AFACT, a deep-pocketed consortium not used to being beaten by an opponent with far less financial resources with one final option - an appeal to the High Court of Australia.
A source close to the case told iTWire that, while AFACT is almost certain to lose its appeal, it is now armed with the knowledge of how to prosecute copyrigt infringement cases against ISPs in future.
'If I had to put a percentage figure on it, I would say that there is an 80% probability that AFACT will lose its appeal against iiNet in the High Court,' the source said.
'That's because AFACT did not prosecute its case using the correct procedures, something it learned during its Federal Court appeal.'
Those correct procedures, according to the source, included negotiating with iiNet to pay costs associated with pursuing alleged copyright infringers and informing iiNet of complete details of the alleged infringement.
However, the source says that AFACT has learned from its mistakes and is already preparing a number of copyright infringement cases against other ISPs, including TPG, Dodo and others.
What's more, the source believes that armed with the knowledge of how to proceed, in future cases AFACT will be successful.
ISPs who are thinking of following iiNet's lead of fighting future copyright infringement cases should think again, according to the source.
'AFACT spent about $20 million on its case against iiNet. Spread between 34 companies that's a drop in the bucket,' the source said.
However, after its almost certain failure against iiNet, the source would not say whether AFACT would be game enough to take on industry heavyweights Telstra and Optus.
The source also revealed that while Telstra was an intensely interested observer of the AFACT versus iiNet case, the dominant carrier committed no money to the iiNet fighting fund.
AFACT has contacted iTWire in response to these comments.
AFACT spokesperson Rebecca Tabakoff said:
"The first issue with this story is that it is based on a single anonymous source.
"It's impossible to declare factually whether one party or another has any chance of winning or losing a court case. The fact that the High Court has granted special leave to hear the appeal should be factored in to this article.
"It must be noted that (Justice) Emmett's judgement was the judgement of a single judge only and not a binding decision of the court."